Arizona Real Estate License Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

In a blanket mortgage, you would most likely encounter a release clause. A blanket mortgage is typically used to finance multiple properties or parcels of land under a single mortgage. The purpose of the release clause is to allow the borrower to sell individual parcels of the property without having to pay off the entire mortgage at once. This clause provides for the release of specific properties from the blanket mortgage once certain conditions are met, often linked to the sale of the property.

The inclusion of a release clause is essential because it offers flexibility for property owners developing or selling portions of their land. It enables them to generate funds from sales while still retaining the overall framework of the mortgage for the remaining parcels. Without this clause, selling one property while still having a blanket mortgage would complicate the process and potentially jeopardize the remaining properties’ financing.

Other clauses such as acceleration, alienation, or subrogation are relevant to mortgages in different contexts but do not specifically pertain to the unique arrangement and needs addressed by a blanket mortgage. The release clause is integral to how blanket mortgages function and facilitate property management and transactions.